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An Individual Retirement Account (IRA) is a popular way to supplement income in later years. By regulation, an IRA account must be maintained as a trust or custodial account at a qualified institution, such as a trust company, bank, or brokerage firm. There are several types of IRA accounts, including Traditional, SEP, Simple, and Roth. Generally, they can be funded by contribution (individual, employer), rollover, or transfer. Rules on contributions, required distributions, and income tax impact are governed by the type of IRA. The assets in IRAs can be professionally managed or self-directed by the IRA owner.


Types of IRAs:

Roth IRA

Investors who meet specific income criteria can contribute up to the annual limit to Roth IRAs each year. Any earnings on assets in a Roth IRA generally grow tax-free. Qualified account distributions also are tax-free, as long as certain requirements are met. Distributions are penalty-free after age 591/2. There is no minimum distribution requirement at age 72.

Roth IRAs may be attractive to investors who expect to be in a higher tax bracket during retirement, or those who prefer to preserve assets for later retirement years or future generations.

Traditional IRA

Individuals can contribute up to the annual limit to Traditional IRAs each year. These contributions may be tax-deductible. Any earnings on assets in a Traditional IRA generally grow tax-deferred. Taxes are paid when the investor takes distributions from the account. Distributions are penalty-free after age 591/2 and must begin by age 72.

Traditional IRAs may be attractive to individuals who expect to be in a lower income bracket during retirement, or those who prefer to defer taxes into retirement.


Investment Products are:

  • Not Insured by the FDIC or Any Federal Government Agency
  • Not a Deposit or Other Obligation of, or Guaranteed by, the Bank or Any Bank Affiliate
  • Subject to Investment Risks, Including Possible Loss of the Principal Amount Invested